The purpose of this study was to identify opportunities, appropriate technologies and suppliers as well as contribute to building the capacity (through technical advice) of developers, financiers and investors in biomass cogeneration. The study also wanted to document the available supportive policy and incentives such as power purchase arrangements and tariffs for captive and excess firm or non-firm power available for potential biomass investors.

By 2006, only 4% of the biomass energy was renewable energy, a situation which the MEMD has planned to change to 61% by 2017.

Past programmes to boost biomass energy efficiency include biogas activities by government, NGOs, donor agencies and individuals. Over 500 biogas digesters were installed in households and institutions, and more than 50 biomass technicians were trained. Specialized production and supply of biogas burners and stoves was also sponsored by USAID. A total of 250,000 plus households keep zero grazing cows and are potential biogas users. However, previous programmes did not include any measures or cogeneration possibilities for large scale farmers in the dairy sector who need power to process milk and related products at their premises.

A model for cogeneration using one 250kW gasifier to supply 600kWh per household for 1,667 households has been examined. The cost of a gasifier is US$ 389,400 and it is estimated to utilize 800 hectares of eucalyptus trees annually, running for 4,000 hours in a year. Power generated by the gasifier can be sold at about 11.00 US cents per unit if delivered directly to the grid, but if the cogeneration option is used, the cost would be about 08.00 US cents. Data from tea factories indicates that current wood reserves are only sufficient for tea production using the same technology. Unless business priorities change, implementing cogeneration with the purpose of selling electricity to the grid may not be a priority for the tea sector in the foreseeable future.

To boost energy efficiency in the tea sector which would, in turn, enhance the viability of cogeneration in the sector, more than 50 energy audits have been conducted to date. In addition, a performance benchmark to monitor energy usage (EPB) was established for participating tea factories. Faster maturing trees of improved species have been planted by most tea estates, and that has helped to improve energy efficiency from making 320 kg of made tea per m³ to 480kg of tea per m³. Consumption of wood in tea factories has also been reduced by more than 50%. On the whole, savings in overall costs have been facilitated by 20% at tea factories. Increased efficiency of wood use in tea factories is expected to eventually set the stage for enable sale of excess electricity from tea-factory based co-generation plants.

A new policy recognizing barriers that hindered development of renewable energy and establishing an enabling legal and institutional framework has been enacted. It provides a power purchase agreement with a feed in tariff and other fiscal incentives for investors.

To boost the renewable energy mix, a power purchase agreement with government is proposed and so is technical staff training for stakeholders as well as sensitizing stakeholders regarding existing opportunities. However, the policy framework still seems inadequate because, four years since it was put in place, it has not attracted any significant investment in cogeneration in other sectors outside the sugar industry. For the future, specialized research in the dairy industry and a strategy of public private partnership investment is being proposed for the tea sector to increase opportunities for promoting cogeneration investments in Uganda.

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